CIT Says Commerce Can't Buck Procedural Restraints in Calculating Accurate AD Rate

The judge also sent back Commerce's reliance on "unverified information" present in two of Assan's submissions on remand at the trade court.

The case centers on Turkey's system of rebating import duties paid by Turkish manufacturers on inputs, called the Inward Processing Regime. Under this system, holders of Inward Processing Certificates (IPCs) can either get refunds of import duties when the certificate closes or the holder can pay no duties at the time of importation and submit a guarantee for the amount that's otherwise owed. Under both options, a certificate holder is liable for all import duties until it ships enough goods to close the IPC.

Should a certificate fail to close, the Turkish government retroactively collects all customs duties. After developing its approach to the scheme, Commerce now requires some indication the certificate was approved.

In its investigation on Turkish aluminum sheet, the agency applied the adjustment to all of Assan's U.S. sales, even though only some of them directly contributed to the receipt of duty exemptions. The agency originally set a per-unit drawback rate for the goods attributable to the closed certificate and applied the adjustment to all U.S. sales. The court rejected this as going beyond a statutory constraint covering drawback benefits, specifically taking issue with the fact the agency made an adjustment for goods linked to open IPCs (see 2404110062).

In particular, only one IPC closed during the investigation period, yet Assan claimed drawback adjustments for three other IPCs that were open. On remand, Commerce reopened the record so Assan could identify its exports to the U.S. that are associated with the sole closed IPC.

In its June 6 submission, Assan identified three more IPCs it said had closed in time for their corresponding sales to get drawback adjustments. The petitioner, the Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group, responded that two of these IPCs didn't bestow any duty drawback benefit and that the third should be rejected, since it counts as "unsolicited new factual information." On June 20, Assan filed another submission framed as containing new information "to rebut, clarify, or correct information contained in Petitioners’ Comments," which the petitioner opposed as not actually responding to any of its objections.

At the trade court, the association claimed that Commerce unlawfully accepted Assan's June 6 and June 20 responses and unlawfully relied on unverified information contained in both responses. Katzmann ultimately held that the agency properly accepted the June 6 response but failed to respond to the petitioner's objection to the acceptance of the June 20 response. The judge held the agency also failed to respond to the petitioner's claim that Commerce relied on unverified information in both of Assan's responses.

Regarding the June 6 response, the association said Commerce ignored its own regulations when considering the unsolicited information on the three additional IPCs, since the agency's questionnaire didn't ask for information on any additional IPCs. While Katzmann said there's "some logic in this point," since Commerce's questionnaire seemingly only referred to the lone IPC at issue, the judge said the agency "acted within its discretion in accepting the closure information." The judge said while the agency's regulations bar "unsolicited questionnaire responses," they don't "require Commerce to narrowly parse its own solicitation."

"The same cannot be said of Commerce’s acceptance of Assan’s June 20 Submission," given Commerce's failure to respond to the association's objection that the submission doesn't actually address any of its points, the judge then said. The agency failed to address the petitioner's "basic objection" that Assan's submission is merely a supplement to its June 6 submission and doesn't address the petitioner's arguments, since the law says the respondent can only "submit factual information to rebut, clarify, or correct factual information submitted in the interested party’s rebuttal."

Katzmann said a claim that an IPC isn't closed isn't "on the same level of abstraction as" a claim that a submission doesn't include sufficient information. While a party can rebut the first type of claim by giving information establishing closure, it's only possible to rebut the second claim by "providing information that the original submission did in fact include sufficient information," the judge said. "When a teacher asks a student why his homework is late, the student gives no answer by turning in his homework," Katzmann quipped.

The court added that Assan didn't explain why it didn't submit documents establishing one of the IPCs' closure as part of its June 6 response. The respondent instead claimed Commerce's non-acceptance of its June 20 submission would have led to an "intentional miscalculation of an inaccurate margin" and an "unlawful disregard" of evidence now establishing that the company's import duties haven't been collected by reason of the export of merchandise under the certificate to the U.S.

To this, Katzmann said Commerce can't pursue its goal of calculating an accurate AD rate by ignoring procedural constraints, adding that the agency's regulations "promote accuracy by incentivizing interested parties to present all relevant facts in a form that Commerce can readily consider."

The petitioner also said that Commerce didn't verify the information in Assan's June 6 and June 20 submissions as required by 19 U.S.C. 1677m(i). Katzmann said the association "advanced a cogent and relevant argument" that the record doesn't have verified information" and cited a case where the court said it was "critical" that the agency collect and verify information on all IPCs submitted by the plaintiffs. "These points at least warranted a response," the judge said.

(Assan Aluminyum Sanayi ve Ticaret v. United States, Slip Op. 25-63, CIT # 21-00246, dated 05/21/25; Judge: Gary Katzmann; Attorneys: Leah Scarpelli of Arent Fox. for plaintiff Assan Aluminyum Sanayi ve Ticaret A.S.; Kyle Beckrich for defendant U.S. government; John Herrmann of Kelley Drye for defendant-intervenor Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group)